The Bloomberg Global Aggregate Green, Social, Sustainability Bond Indices are an addition to Bloomberg’s range of fixed income indices, all of which focus on environmental, social and governance (ESG) issues.
According to BloombergNEF, sustainable debt is growing at a rapid pace, with global sustainable debt issuance to date exceeding $1 trillion.
The indices use the Bloomberg Global Aggregate Index and Bloomberg Sustainable Finance Group’s Green, Social and Sustainable Bond Indicators.
They also use fields that indicate compliance with the principles and recommendations of the International Capital Markets Association “Green Bonds”, “Social Bonds” and “Sustainable Development Bonds”.
They all use datasets from Bloomberg’s ESG data processing group.
Bloomberg Terminal clients will also benefit from the transparency of the underlying bond documentation.
This includes the use of revenue allocation for appropriate project categories and sub-categories, and alignment with the United Nations Sustainable Development Goals.
For fund managers, it offers more seamless integration into portfolio management workflows, including for performance and attribution.
Indexes can be customized to meet the specific individual needs of investors using additional fields such as certain exclusions, regulatory “reported” fields such as SFDR and EU taxonomy inputs, and even sector-specific weightings, among others.
The new “Sustainable Index Eligibility Indicator” field allows Bloomberg Terminal clients to analyze those securities that are currently included in the index, as well as those that are at risk of exclusion.
The relevant instruments, which range from corporate, sovereign, supranational and agency bonds (SSA), municipal and structured products, are individually researched and supported by Bloomberg’s dedicated fixed income and ESG data team.
This is done to ensure that securities are quickly screened and properly labeled using Bloomberg’s extensive data collection and processing technologies.
All securities are further audited to ensure that current reporting is supported by the issuer’s filing of exposure and distribution reports.
Jonathan Gardiner, product manager for sustainable indices at Bloomberg Indices, said: “We aim to capture both short- and long-term market trends with our sustainable index offering.
“Building on Bloomberg’s flagship Global Aggregate index, our new Global Aggregate Green, Social & Sustainability Bond Indices incorporate research from Bloomberg’s ESG and fixed income data teams to provide a diverse set of indices to meet the diverse needs of the investment community exploring this growing market” .
The Bloomberg Global Aggregate Green, Social, Sustainability Bond Indices consist of 24 new indices, including, but not limited to: Bloomberg Global Aggregate Green Social Sustainability Bond Index, Bloomberg Global Aggregate Green Bond Index, Bloomberg Global Aggregate Social Bond Index, Bloomberg Global Aggregate Sustainability Bond Index Bloomberg Aggregate EUR Green Social Sustainability Bond Index Bloomberg Aggregate USD Green Social Sustainability Bond.
Indices are now available for benchmarking, asset allocation and product creation.
Bloomberg recently introduced the Bloomberg US Municipal Impact Index to track green, social and sustainable municipal bonds, as well as Bloomberg Climate Indices, including the EU’s Paris benchmarks.